The lifting of a caveat on part of the controversial Five Mile development near Frankton by the Queenstown Lakes District Council removes the last obstacle to the site being sold.
The council placed the caveat last year to protect its interest in land it developed into a sports field next to the Queenstown Events Centre before Five Mile went into receivership.
Five Mile Holdings Ltd, owned by developer Dave Henderson, was placed in receivership in July 2008 with total claims of $79.6 million.
While the land was still part of the Five Mile title, it had been developed by the council as a sports field, with a soil bund around it, using council reserve contribution funds on the understanding it acted as a drainage area for the defunct development.
It has been previously reported $700,000 was spent on the development, funded jointly by the council and Five Mile.
The money was spent on the sports field land on the agreement between Mr Henderson and the council to undertake a land swap with the relocation of Grant Rd when Five Mile went ahead.
The caveat marked that agreement.
Council chief executive Duncan Field said a party he would not identify approached the council to lift the caveat because it was preventing a potential purchase agreement.
He said the council and the party had reached an alternative agreement.
"The agreement is that there are arrangements in place for that land to be ultimately acquired by council," he said.
The potential new owner would have to apply for resource consent to subdivide the land to create a separate title for the sports field.
Ownership of the sports ground would then be transferred to the council through the District Land Registry, he said.
"So that will take some time," Mr Field said.
The 31ha site was put up for mortgagee sale by international tender in February by Hanover Finance.
